"Punishment"? Re: Centralization

[Justin Schwartz]

.
>
>At 8:40 PM +0000 7/4/02, Justin Schwartz wrote:
>>>There would have to be disincentives for making hideous shoes that no one 
>>>would buy, but how would you "punish" workers and managers when there is 
>>>_no_ punishing unemployment?
>>
>>They wouldn't make profit, so they'd have less money. At the worst, theit 
>>firm would go bankrupt, and they'd have to find another job.
>>
>>>There wouldn't be
>>>unemployment under market socialism of your conception either, right?
>>
>>Right, except for frictional (when people change jobs).
>
>Wouldn't changing jobs (when the right to some job is guaranteed) be a 
>disincentive, not for the workers and managers responsible for hideous 
>shoes, but for those who must create new jobs for them?
>-.

In a worker-self managed market socialist economy, former self-managers or 
cooperators at failed cooperatives have find of create their own jobs, much 
as under a capitalist economy. The government offers incentives to create 
coos where needed, and serves as employer of last resort for those who 
cannot land a coop job. So, the incentive to create or find the new job is 
on the former cooperator. Obviously the govt has some reason not to let 
coops fail, so a market socialist economy needs a hard budget comstraint, 
forced bankruptcy, to close down failing firms. Janos Kornai is good on 
this.

jks

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